By Sanjay Suri

An informal summit in London Monday night brought clear
indications that little agreement can be expected at a meeting of ministers
in Hong Kong next month to agree a new trade deal.

The 'G4' summit hosted by the Indian government in London brought together
European Union trade commissioner Peter Mandelson, U.S. trade representative
Rob Portman, and Brazilian minister for external relations Celso Amorim
besides Indian commerce minister Kamal Nath. Japanese trade and industry
minister T. Nikai attended as guest. The mini-summit was called in another attempt to break the deadlock over the
Doha development round of talks. The talks were started in Doha in Qatar to
work out a new global trade agreement among member countries of the World
Trade Organisation (WTO).

The talks have stalled mainly over refusal of the European Union (EU) and
other developed countries to drop subsidies on agricultural goods. As the EU
sees it, much of the problem arises because developing countries are not
opening their markets to industrial goods and services from the developed
countries. Mandelson offered some concessions on subsidies and tariffs on import of
agricultural goods. He offered to cut average EU agriculture tariff from
22.8 percent to 12.2 percent. He also offered a 70 percent reduction in
agriculture subsidies. This ''bold offer'', he said, was as far as Europe
would go. Several independent development groups said the offer was
outrageously little. Mandelson refused to budge from that position at the Monday talks. ''There
is no change in the positions,'' Kamal Nath told IPS after the meeting.

That meant that developing countries too will not give in to EU demands on
non-agricultural market access (Nama). ''Obviously expectations in Hong Kong
have to be tempered based on the availability of time, and the continuing
divergence on various issues,'' Kamal Nath said. ''Expectations from Hong Kong are not what they were two months ago,'' he
added. ''That is clear enough.'' The holding of such talks could itself become misleading, even comical,
Amorim told media representatives after the talks. With all ''the diplomatic
drama, or comedy for that matter, I think there is a lot of ground where the
gaps are still very big,'' he said. ''Of course divergences remain,'' Mandelson said. He said a discussion like
this now needed to ''be enlarged to a broader section of countries and WTO
members.''

Talks are now expected to continue well into the next year, and possibly
beyond. ''We're not lowering the expectation of the round,'' Nath said.
''There is next year to continue negotiations.'' For developing countries again, no result could prove better than a bad
result, as at the last WTO ministers meeting in Cancun in Mexico in
September 2003. ''We're not going to have just any result, we must have a result which is
consistent with the object of a development round,'' Nath told IPS.

In an article in the International Herald Tribune Oct. 30, Peter Mandelson
said that besides cutting its ''trade distorting farm supports'' by 70
percent, the EU would agree to ''eliminate all agricultural export subsidies
by an agreed date if others offer watertight commitments to do the same in
their equivalent programmes.'' This he said, ''is also Europe's bottom line, because we also have to
respect our responsibilities to European farmers.''

Kamal Nath spoke of this as merely ''a good starting point'' for further
talks. And he said a country like India would not even consider the demands
for industrial goods and services access that the EU is talking about.
The impasse has led to an apprehension that this round of talks that began
in Doha in 2001 will not only be delayed further, but might actually get
derailed.

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